STATS ChipPAC Announces Plan for Its Malaysia Plant and Provides Update for Second Quarter 2013

STATS ChipPAC Announces Plan for Its Malaysia Plant and Provides Update for 
Second Quarter 2013 
SINGAPORE -- 28 JUNE 2013, UNITED STATES -- (Marketwired) -- 06/28/13
--  STATS ChipPAC Ltd. ("STATS ChipPAC" or the "Company") (SGX-ST:
STATSChP) (SGX: S24), a leading provider of advanced semiconductor
packaging and test services, today announced the plan to consolidate
its leaded wirebond packaging and related test operations in Kuala
Lumpur, Malaysia into its Qingpu, Shanghai, China operations over
several phases in 2013 and 2014, and the closure of its Malaysia
plant by the end of 2014.  
Tan Lay Koon, President and Chief Executive Officer, STATS ChipPAC,
said, "The announced plan will consolidate our manufacturing
footprint into larger scale plants and achieve a more competitive
cost structure over the longer term."  
The Company currently expects to incur total charges of approximately
$39 million, comprising employee severance and benefit costs of
approximately $19 million, non-cash asset impairment charges of
approximately $18 million and other associated costs of approximately
$2 million. Of the total charges, approximately $37 million and $2
million will be incurred in the second quarter of 2013 and in 2014,
respectively.  
The plant closure will affect approximately 1,100 of our employees in
Malaysia, representing approximately 11% of our total global
workforce. The Company will ensure that fair severance benefits and
outplacement support will be provided to affected employees.  
The consolidation into China will position the Company to better
engage its customers with broader product offerings and at a more
competitive cost structure for its leaded wirebond solutions. 
Outlook 
STATS ChipPAC provided its outlook for the second quarter 2013 on 24
April 2013 when the Company expected net revenues to increase
approximately 2% to 6% compared to the prior quarter, with adjusted
EBITDA(1) in the range of 21% to 25% of revenue. The Company now
expects net revenues for the second quarter of 2013 to decrease
approximately 3% to 4% compared to the prior quarter, with adjusted
EBITDA(1) in the range of 21% to 23% of revenue. We expect capital
expenditure(2) in the second quarter of 2013 to remain at
approximately $100 million to $120 million. 
The outlook is subject to a number of risks and uncertainties that
could cause actual events or results to differ materially from those
disclosed in the outlook statements. These statements are based on
our management's beliefs and assumptions, which involve judgments
about future trends, events and conditions, all of which are subject
to change and many of which are beyond our control. Please refer to
our Financial Statements for the three months ended 31 March 2013
filed with the Singapore Exchange Securities Trading Limited
("SGX-ST") for the major assumptions made in preparing our outlook
for the second quarter 2013. Investors should consider these
assumptions and make their own assessment of the future performance
of STATS ChipPAC and note that there may not be a direct correlation
between the net income of the Company with adjusted EBITDA as a
percentage of revenue. 
(1) Adjusted EBITDA is not required by, or presented in accordance
with, Singapore Financial Reporting Standards ("FRS"). We define
adjusted EBITDA as net income attributable to STATS ChipPAC Ltd. plus
income tax expense, interest expense, net, depreciation and
amortisation, restructuring charges, share-based compensation,
goodwill and equipment impairment, tender offer, debt exchange or
debt redemption expenses and write-off of debt issuance costs.
Adjusted EBITDA excludes the restructuring, plant closure and
associated charges related to our announced plan for the Malaysia
plant. We present adjusted EBITDA as a supplemental measure of our
performance. Management believes the non-FRS financial measure is
useful to investors in enabling them to perform additional analysis. 
(2) Capital expenditure refers to acquisitions of production
equipment, asset upgrades and infrastructure investments. 
Forward-Looking Statements
 Certain statements in this release are
forward-looking statements that involve a number of risks and
uncertainties that could cause actual results to differ materially
from those described in this release. Factors that could cause actual
results to differ include, but are not limited to, inability to
consolidate our Malaysia operations into our China operations;
uncertainty as to whether such plan will achieve the expected
objectives and results; general business and economic conditions and
the state of the semiconductor industry; prevailing market
conditions; demand for end-use applications products such as
communications equipment, consumer and multi-applications and
personal computers; decisions by customers to discontinue outsourcing
of test and packaging services; level of competition; our reliance on
a small group of principal customers; our continued success in
technological innovations; pricing pressures, including declines in
average selling prices; intellectual property rights disputes and
litigation; our ability to control operating expenses; our
substantial level of indebtedness and access to credit markets;
potential impairment charges; availability of financing; changes in
our product mix; our capacity utilisation; delays in acquiring or
installing new equipment; limitations imposed by our financing
arrangements which may limit our ability to maintain and grow our
business; returns from research and development investments; changes
in customer order patterns; customer credit risks; disruption of our
operations; shortages in supply of key components and disruption in
supply chain; the amount of the business interruption insurance claim
due to flooding of the Thailand Plant; loss of key management or
other personnel; defects or malfunctions in our testing equipment or
packages; rescheduling or cancelling of customer orders; adverse tax
and other financial consequences if the taxing authorities do not
agree with our interpretation of the applicable tax laws;
classification of our Company as a passive foreign investment
company; our ability to develop and protect our intellectual
property; changes in environmental laws and regulations; exchange
rate fluctuations; regulatory approvals for further investments in
our subsidiaries; majority ownership by Temasek Holdings (Private)
Limited ("Temasek") that may result in conflicting interests with
Temasek and our affiliates; unsuccessful acquisitions and investments
in other companies and businesses; labour union problems in South
Korea; uncertainties of conducting business in China and changes in
laws, currency policy and political instability in other countries in
Asia; natural calamities and disasters, including outbreaks of
epidemics and communicable diseases; the continued trading and
listing of our ordinary shares on the Singapore Exchange Securities
Trading Limited ("SGX-ST"). You should not unduly rely on such
statements. We do not intend, and do not assume any obligation, to
update any forward-looking statements to reflect subsequent events or
circumstances. 
About STATS ChipPAC Ltd. 
 STATS ChipPAC Ltd. (SGX-ST Code: S24) is a
leading service provider of semiconductor packaging design, assembly,
test and distribution solutions in diverse end market applications
including communications, digital consumer and computing. With global
headquarters in Singapore, STATS ChipPAC has design, research and
development, manufacturing or customer support offices throughout
Asia, the United States and Europe. STATS ChipPAC is listed on the
SGX-ST. Further information is available at www.statschippac.com.
Information contained in this website does not constitute a part of
this release.  
Investor Relations Contact:
Tham Kah Locke
Vice President of Corporate Finance 
Tel: (65) 6824 7788 
Fax: (65) 6720 7826
email: kahlocke.tham@statschippac.com 
Media Contact:
Lisa Lavin
Deputy Director of Marketing Communications
Tel: (208) 867-9859
email: lisa.lavin@statschippac.com 
 
 
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